If you join Scentsy or operate any other type of home based business it is very important to asses your insurance coverage needs. Specifically, you need to determine how much insurance coverage you have and whether it actually covers a potential risk of loss related to the operation of your business.
The National Bureau of Labor Statistics reports 30% of homeowners operate home based business and most likely greater than 50% of these businesses are underinsured. It is thought that the amount of underinsurance stems from a false assumption that the business operator’s homeowner’s insurance policy will cover more than it actually does. Significantly, a typical homeowner’s insurance policy will not cover personal injury claims or other losses related to the operation of a home based business.
Fortunately, the insurance industry has adapted to the needs of the growing population of home based businesses. In many situations a lapse of coverage can be managed by adding what is called an “endorsement” or amendment to your homeowner’s policy to specifically cover additional risk incurred through the operation of a home based business. In addition, many insurance providers now offer policies specifically tailored to provide coverage for home based businesses. These policies can cover personal injury liability or other losses related to the operation of a home based business. For home based businesses that function in multiple locations outside the home there is a unique product called a B.O.P. or Business Owner’s Package Policy which will extend coverage to liability arising outside the home as well.
Insurance packages will vary from company to company and jurisdiction to jurisdiction. Accordingly, if you are in the market for this type of coverage it is probably a good idea to consult aninsurance professional who will be familiar with the types of policies available and the particular legal nuances of your state.